Westpac has introduced the ability for customers to set up multiple offset accounts at no extra cost, providing flexibility in managing finances and potential for significant interest savings on home loans.
Over the past five years, Westpac has observed a significant uptick in the usage of offset accounts, with a 37% increase in new accounts and a 63% rise in the balances maintained within them.
Recent research by the banking giant shows that 71% of Australians with an offset account utilise it primarily to cut down their mortgage costs.
By maintaining a balance of $10,000 and adding an additional $100 monthly, borrowers can potentially save more than $110,000 in interest on a $500,000 loan over 30 years, while also reducing the loan term by nearly three years.
Damien MacRae (pictured above), Westpac managing director of mortgages, stressed the benefits of this initiative.
“With interest rates top of mind for Australians, we know many customers are thinking about how to get ahead on their home loan,” MacRae said.
The option to set up to 10 separate offset accounts will allow customers to organise their savings with greater precision, allocating funds for specific expenses such as daily costs, vacations, or emergency funds.
“This can offer benefits such as more visibility and control over how you allocate your money, manage your cash flow, and track spending,” MacRae said.
The flexibility of multiple offset accounts also enables customers to share a home loan with family or friends while keeping their individual finances distinct.
This approach aligns with broader trends observed among Australian homeowners; in response to escalating living costs and mortgage expenses, 54% of respondents in a recent Mozo survey have turned to using offset accounts as a strategic financial management tool.
Starting today, brokers and lenders can request this feature for eligible clients, and, by March, Westpac customers with qualifying loans can manage their offset accounts directly through the Westpac app or by visiting a branch.
